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Location Choice and Employment Decisions: A Comparison of German and Swedish Multinationals

Sascha Becker (), Karolina Ekholm (), Robert Jäckle () and Marc-Andreas Muendler ()

No 4, ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: Using data on German and Swedish multinational enterprises (MNEs), this paper analyzes determinants of international location choice and the degree of substitutability of labor across locations. Countries with highly skilled labor forces strongly attract German but not necessarily Swedish MNEs. In MNEs from either country, affiliate employment tends to substitute for employment at the parent firm. At the margin, substitutability is the strongest with respect to affiliate employment in Western Europe. A one percent larger wage gap between Germany and locations in Central and Eastern Europe (CEE) is associated with 900 fewer jobs at German parents and 5,000 more jobs at affiliates in CEE. A one percent larger wage gap between Sweden and CEE is associated with 140 fewer jobs at Swedish parents and 260 more jobs at affiliates in CEE.

Keywords: Multinational enterprises; location choice; multinomial choice; labor demand; translog cost function (search for similar items in EconPapers)
JEL-codes: F21 F23 J21 J23 (search for similar items in EconPapers)
Date: 2005
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http://www.cesifo-group.de/DocDL/IfoWorkingPaper-4.pdf (application/pdf)

Related works:
Journal Article: Location Choice and Employment Decisions: A Comparison of German and Swedish Multinationals (2005) Downloads
Working Paper: Location Choice and Employment Decisions: A Comparison of German and Swedish Multinationals (2005) Downloads
Working Paper: Location Choice and Employment Decisions: A Comparison of German and Swedish Multinationals (2005) Downloads
Working Paper: Location choice and employment decisions: a comparison of German and Swedish multinationals (2005) Downloads
Working Paper: Location Choices and Employment Decisions: A Comparison of German and Swedish Multinationals (2004) Downloads
Working Paper: Location Choice and Employment Decisions: A Comparison of German and Swedish Multinationals (2004) Downloads
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